Warren Buffett : Decoding His Brain During Pandemic

Decoding The Brain Of Warren Buffet In Times Of The Pandemic
Decoding The Brain Of Warren Buffet In Times Of The Pandemic

The state-by-state lockdowns in the US have affected the national economy. Even as a billionaire shareholder, named Warren Buffett, acknowledged that the COVID-19 pandemic could considerably damage the national economy, he claimed that the US’ capacity to survive crises presents a silver lining to fight the coronavirus. As the COVID-19 crisis spread out, many people were asking where Warren Buffett is. They want to hear some views from the most literary and famed American Investor, Buffet. They want to get more clarity on the crisis from the “Oracle of Omaha.” Warren Buffett answered some of the questions asked by investors on the 2nd of May in a live-streamed interview. While hosting the annual meeting of his company, Berkshire Hathaway Inc., he answered questions from shareholders and journalists, including how the corporation business has been affected due to the COVID-19 pandemic. However, the listeners were expecting views of Buffett on the world during such a pandemic time. 

Decoding The Brain Of Warren Buffet In Times Of The Pandemic
Decoding The Brain Of Warren Buffet In Times Of The Pandemic
Warren Buffett : Decoding His Brain During Pandemic

Is It A Perfect Moment To Give A Name To A Successor? Warren Buffett

Warren Buffett’s long time business partner, Charlie Munger, who is 96 years old and vice-chairman of Berkshire, was not present on the live-streamed call. Buffett will turn 90 in the coming August in his letter to investors in February that he and Munger are in the critical zone. For the first time, Warren Buffett had done the Question and Answer together with Greg Abel. Though various signs show that Abel would be the next CEO, however, Buffett had not announced anything about it. 

In the meeting, Buffett announced that Munger was in good health and well shape and looking ahead to attend Berkshire’s annual meeting in 2021. Buffett had also said if he dies or became incapacitated then its board of directors should find a new CEO. It was supposed to be hard for the shareholders to accept anyone else as CEO and get comfortable with him. However,  due to the COVID 19 outbreak, it’s a good chance for Buffett to explain why Greg Abel is suitable to manage the firm.

Howard, the eldest son of Warren Buffett, would likely turn out to be a non-executive chairman. Todd Combs and Ted Weschler, portfolio managers, could succeed Warren Buffett as a chief investment officer. Apart from it, Buffett stated that Berkshire was able to expand its workforce of around 391,539 people at the end of the year. 

Can “New Normal” Concept Change Future Investment of Berkshire? 

The complete shutdowns in the entire country impacted business and economic conditions to a great extent. Maybe it’s because of this outbreak that Warren Buffett is not thinking yet about any other achievement. Buffett might be thinking to reconsider what business types will recover. Apart from it, he might be tackling the latent for long-term changes in client behavior. Buffett has taken a stake in the Kroger Co. Supermarket chain last year. It has proven to be prophetic. 

Berkshire reported a net loss of 449.75 billion, starting to reflect massive losses on frequent stock holdings due to market compacts like Bank of America Corp and Apple Inc. Buffett stated that the operating earnings throughout this year would be significantly less due to the pandemic. 

Warren Buffett : Do The Best Days Still Lying In America?

Warren Buffett has observed his share of crises, and they have never appeared to tremble his hopefulness that the United States will carry on to prosper in a long way. In his annual letters to stakeholders, he always replicates a mantra that the USA’s finest days lie ahead. However, he was completely quiet during the pandemic in terms of media, such as TV appearances and deal activity. Investors were waiting to know how the nation’s hungriest dealmaker and renowned cheerleader felt about its long-term views on the pandemic. 

Buffett claimed that nothing could stop America to progress and the best days are still ahead. He called dealing with COVID-19 pandemic as an experiment that has a diverse range of achievable economic outcomes. He said that markets or businesses could do anything. He said that the American vision and its magic have always succeeded, and it will do so again. 

Will The Airline Industry In The US Ever Improve?

Warren Buffett has plagued history with the airline industry. In 2001, he swore off the airline industry by saying that if he got the push to invest in airlines, he would call an 800 number and say he is an air-o-holic. However, with time, Buffett overcame the number and went all-in on airline stocks in 2016. Now, Berkshire is the largest investor of Delta Air Lines Inc., which is the second leading owner of United Airlines Holding Inc. and has the third-largest share in American Airlines Group Inc. 

In the year 2020, almost all the airline industry fell as the pandemic caused devastation in the air and other travel industries. During a Yahoo Finance interview on March 10, Warren Buffett claimed that he would not be selling airline stakes. However, that statement was before the lockdown over the entire country. After some weeks,  Berkshire compacts it’s southwest and delta positions. However, it’s still at the No. 1 and No. 2 position in terms of investors. Moreover, Warren Buffett said that he made a mistake by investing in an airline sector, in which the pandemic time has changed significantly. 

Pandemic Enforces to Reconsider “essential” workers. 

Does It Call New Ideas To Overcome Wealth Inequality?

Warren Buffett employs various other essential workers by himself. They are functioning  freight trains that are forwarding goods and other services around the country.  Along with it,  they are focusing on manufacturing Duracell batteries. From coating car interiors to yoga pants, Lubrizol is the chemical used for everything. It has helped to make hand sanitizer used in such a pandemic time. Fruit of the loom helps make protective face masks that are helpful to get protection from coronavirus. Buffett’s company, Berkshire, is also the biggest investor of food giant Kraft Heinz Co.

In his interview for Yahoo Finance, Warren Buffett talked about the wealth gap. He claimed that the wealth gap is a sign that workers are rewarded based on their efficient works respected by the market. He stated that people who are exceptionally good at something that the market demands, get tremendous awards. Generally, businesses demand various basic things, and this pandemic time has shown the importance of workers’ skills and specialties.

Buffett said that he does not want people left behind; however, it’s due to the pandemic that letting the system function the mode it does is the best option. Moreover, he has supported an extension of the Earned Income Tax credit (EITC) as a crucial way of giving more money to low-income families instead of focusing on the minimum wage. It is because hiking the minimum wage can go wrong by escalating unemployment. Earned Income Tax credit does not have the same loop to it as $ 15 plus it’s not as simply implicit as earning more per hour. Apart from it, Warren Buffett has also termed for upper taxes on the ultra-wealthy, like himself. 

Warren Buffett’s Final Thoughts for Surviving Pandemic Financially

Warren Buffett states that his company Berkshire Hathway Inc. having a huge holding in the stock business, would suffer massive losses due to the pandemic. However, he is ready to face all those challenges, and his company would be set for business the next day. He has some critical tips to share to survive the COVID-19 crisis financially. 

Warren Buffett : Prepare Yourself For The Worst.

If one wants to prepare themselves for the worst situation in the pandemic, it’s highly recommendable to buy health and life insurance. With just a few online search steps, one can find good insurance products conveniently that can protect your loved ones financially if anything happens to you. In addition to it,  by buying medical insurance,  an individual can protect himself from any other hospitalization charges of his family.

Do Not Load Credit Card Debt In Pandemic Times

During the ongoing lockdown, with the pay cuts and layoffs, many people are loading themselves with credit card debt. It draws nearly 40% interest a year. Warren Buffett stated that some people use credit cards as a piggy bank to be attacked. There are several financial planners who advise that whenever you go up with a large credit card debt,  just combine it.  Then turn that debt into a personal loan.  In this way,  you would be charged by lower interest as compared to that of credit card debt.

In this pandemic time,  there are fewer statements on the investment activity of Buffett.  Several observers recall how Berkshire gained achievements and observed high investment opportunities at the time of the 2008-2009 crisis. In today’s pandemic, even if opportunities occur, survival and liquidity remain supreme to Buffett. The survival term includes maintenance of plentiful liquidity,  which means Buffett is not going to use capital to other stocks.